Washington, DC -- (ReleaseWire) -- 06/07/2016 --Humbug, poppycock, balderdash, twaddle, hooey, drivel. Our grandparents had quite a vocabulary for what we might today describe (if we're being polite) as BS. We might as well add "statements from the Federal Reserve, government bureaucrats and politicians" to that list. The question, though, is what do we really mean when we say something is BS? Philosopher and Emeritus Professor at Princeton Harry G. Frankfurt put some ideas on that forth in a 1986 essay that was later expanded into a book and published by Princeton University Press, called On Bullshit. "The reason why there is so much bullshit out there, I think, is that people just want to talk, and if they don't talk they don't get paid. The advertiser wants to gain sales, the politician wants to gain votes. But they have to talk about things they don't really know much about, so since they don't have anything really valid to say, they just say whatever they think will interest the audience and make it appear that they know what they're talking about and, therefore, it comes out as bullshit." Sure, we all understand the impulse, but BS is, perhaps, even more pernicious than flat-out lying. Frankfurt goes on to suggest that both the liar and the honest person must at least recognize and at some level understand the truth about the world as it is, but the BS-er has no such limitations. BS is even more of an attack on truth than outright lies.
It seems to me that, especially for the last seven years, the Federal Reserve has been an endless fount of BS. Time and again, the institution has demonstrated itself painfully clueless, and even now they continue to talk about intentions to push on with a rate hike despite a tough economy and de facto recession. Even the global economy seems just one tornado away from contraction. Risk is almost in every nook and cranny of our financial system, and of course that raises the probability of a meltdown. When the Fed tells you that growth is on the way, because that's all they've been telling us, what they're not seeing is what a non-BSer can see as far as the horizon: the consequences of borrowing from the future. It's truly sad that the Fed has an obsession with BSing us about growth at any cost, because that's what they're willing to do, is to get growth at any cost. Of course, we're going to end up paying for it.
While the Fed touts a "recovering" economy and markets zooming higher to justify continuing interest in a rate hike, the truth about the world as it is once again reared its ugly head last week, in news about jobs. For example, Shell Oil Company cut more than 2,200 jobs during the past two weeks, bringing total losses to 12,500 jobs. Microsoft unveiled job cuts as many as 1,850 job cuts and they're going to be taking a $450 million impairment charge in restructuring their books (to account for a "loss of goodwill") along with it. Even Intel plans to cut somewhere between 300-350 jobs in Germany. The list of layoffs goes on, and Janet Yellen's continued crowing on the health and vigor of the economy seems to simply ignore the facts. Maybe she's not lying to us, per se, but is truly BS-ing us in Professor Frankfurt's sense: speaking because she has to speak, ignorant or or deluded about the actual truth?
And then, we come to the May jobs reported. In May, the U.S. added only 38,000 jobs, the worst number since September of 2010. Labor force participation slipped 0.4% during April and May, leaving us at 62.60% of Americans participating, almost at the thirty-five year low of 62.40% from last October. The unemployment rate for May stands at 4.7%, a figure we haven't seen since 2007. Worse, we continue to lose full-time jobs and replace them with part-time positions, and as the provisions of ObamaCare continue to bite into employers' bottom lines, that trend will likely escalate, not reverse. This does not look like a recovery, to me, and it certainly doesn't look healthy. And yet the Fed keeps playing their same old games and saying that up is sideways and diagonal is down. I call BS.
One item from last week that has no element of BS about it is the death of American icon Muhammad Ali, and I'd like to take a paragraph to say something about that. I worked managing money for Mr. Ali and the Ali Center for about five years, and he was a man of integrity who cared about doing the right thing far more than he cared about making money. I think there are two lessons we can take from the great boxer upon his death. The first is that integrity, the fact that no matter how loud or flamboyant he became, he was always speaking from a place of conviction and understanding of the truth about himself as well as his sport. He never backed down from a fight, whether in the ring or in the fight for Civil Rights or in his convictions as a conscientious objector during the Vietnam War. This was a man who lived life with no BS, and an example to us all. The second lesson is that we need to protect our children and our athletes. There's no definitive answer saying that the repeated beatings Ali took to the head caused the Parkinson's Disease that took his life, but there is general consensus that they at least contributed. Watch your children and their coaches in contact sports and insist that they be properly protected. There is no reason for another generation of athletes to suffer the brain injuries that past generations have.
For over a quarter century, Dawn Bennett has been successfully guiding clients through the complexities of wealth management. Her unique vision and insight into market trends makes Bennett a much sought after expert resource with regular appearances on Fox News Channel, CNBC, Bloomberg TV, and MSNBC as well as being featured in Business Week, Fortune, The NY Times, The NY Sun, Washington Business Journal in addition to her highly regarded weekly talk radio program - Financial Mythbusting. Through prudent and thoughtful advice, Dawn Bennett has strived to consistently provide the highest quality of guidance.
About Dawn Bennett
Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting http://www.financialmythbusting.com.
She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included rock legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN a as well as take podcasts on the road and forums for interaction.
She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett.
Dawn Bennett, Host of Financial Myth Busting, Writes Article, "BS by Any Other Name"